Update: The excitement surrounding Cardano is once again building as its Vasil upgrade on 22 September draws nearer.
Table of Contents
- Cardano’s Vasil hardfork
- What is Cardano (ADA)?
- What makes Cardano different?
- Cardano Roadmap and 5 Eras
- How Is Cardano Different From Bitcoin Or Ethereum?
- Cardano Use Cases
- Benefits of Cardano
- Cardano Ecosystem
Cardano (ADA) is one of the most popular cryptocurrency networks, with a runaway success and widespread adoption that have led to some observers defining its native asset ADA as “Japanese Ethereum”, thanks to its popularity in Japan. While the project has been lauded for its academic approach to development, strong peer review system, and big altruistic ambitions, Cardano has been criticized for taking too long to roll out important development milestones.
Therefore, the upcoming Vasil hard fork on 22 September 2022 is getting its ADA fans once again excited, especially as it will introduce several new key features and follows several frustrating long delays.
Learn more about our cold storage support for Cardano here. CoolWallet Pro is a leading ADA hardware wallet that also supports layer 0 , 1 and 2 assets like Polkadot ,Solana, BSC, Avalanche, Polygon, Optimism and Arbitrum.
What is Cardano’s Vasil hard fork? (September 2022 update)
Vasil is a hard fork upgrade that aims to accelerate the network, make it more scalable, and decrease transaction fees. It was named after Vasil St Dabov, a beloved Cardano Foundation member and academic who died in 2021.
The Vasil planned hardfork follows 2021’s very important Alonzo upgrade, which brought full smart contract functionality to the ADA blockchain and was a significant step forward for the project. The upgrade also introduced a native smart contract language, called Plutus, that’s comparable to Ethereum’s Solidity.
Alonzo opened up Cardano’s platform for decentralized finance (DeFi), decentralized application (DApps), and decentralized exchange (DEX) solutions. Alonzo built on previous updates like Shelley, Allegra, and Mary, creating a multi-functional and smart contract-powered environment that could be developed with Plutus along with native tokens introduced in the Mary upgrade.
The Vasil upgrade is expected to be implemented without any major issues. However, as with any major update, there is always a risk of something going wrong. So far, all testing has been positive, but it is always possible for something to go wrong at the last minute.
Vasil will launch five important mechanisms, namely CIP-31, CIP-32, CIP-33, CIP-40, and diffusion pipelining.
- CIP-31, aka “reference inputs” will introduce a new kind of input that will optimize transaction throughput and increase concurrency.
- CIP-32 will create simpler and quicker communication of datum values between users.
- CIP-33 will enable reference scripts to improve the validation process and reduce transaction size.
- CIP-40 will introduce collateral output transactions, aimed at improving the overall scalability of the network.
- Diffusing pipelining will enable more DApp deployment by overlaying certain steps that a block needs to go through as it moves across the chain, allowing for more concurrent transactions.
Why is the Cardano Vasil hard fork necessary?
The Cardano Vasil upgrade is necessary to improve the performance of the Cardano blockchain. This will enable it to handle more transactions and support a larger user base. Vasil has been scheduled for 22 September 2022 and will herald in the next major upgrade to the Cardano protocol using Cardano’s hard fork combinator (HFC) approach.
The upgrade will bring in changes that will improve the handling of on-chain (Plutus) scripts, reducing user costs and allowing greater script throughput. Vasil’s changes form the first stages of a series of planned improvements that will be rolled out over time.
The Cardano blockchain is based on the Haskell programming language, which is known for its efficiency and stability. However, the Haskell code is not as efficient as it could be, so the Cardano Vasil upgrade will optimize the code to make it run faster.
The Cardano Vasil upgrade will also improve the security of the blockchain, making it more resistant to attack. It will also make it easier to integrate with other blockchains, which will facilitate the growth of the Cardano ecosystem.
What is Cardano (ADA)?
Cardano is a proof-of-stake (PoS) blockchain platform and the first to be founded on peer-reviewed research and developed through evidence-based methods. It merges innovative and groundbreaking technologies to help make decentralized applications, systems, and societies highly secure and sustainable. Cardano’s big advantages include its academic community, proof-of-stake mechanism, called Ouroboros, and its ability to be regulatory compliant.
Cardano has a current market cap of $17 billion, with a max supply of 45 billion ADA. There are currently about 32 billion ADA in circulation.
Cardano’s mission is to “redistribute power from unaccountable structures to the margins” – to individuals in order to help create positive change and progress across the world.
Development on the Cardano platform started in 2015 and the project was officially launched in 2017 by Charles Hoskinson, a charismatic co-founder of Ethereum, and is managed by the Cardano Foundation in Zug, Switzerland, along with research and development from IOG (previously Input Output Hong Kong, or IOHK), a blockchain engineering company which was also founded by Hoskinson.
Hoskinson left Ethereum after a dispute with the project’s co-founder, Vitalik Buterin, supposedly over the issue of whether to accept venture capital.
When Cardano launched in 2017 it had a market cap of around $600 million. By the end of 2017, it had grown to $10 billion and its highest market cap was around $35 billion. In 2021’s bull market the cryptocurrency saw significant growth and has traded as high as $3 per token, before retracing during the 2022 bear market.
Cardano: A Third-Gen Crypto
Cardano was created to solve many of the perceived shortcomings with Ethereum and other cryptocurrencies in general. ADA supports transactions, staking, and native coins, and in September 2021 it finally added the ability to use smart contracts through its Alonzo upgrade, which allows Cardano to compete with others such as Ethereum, Solana, Cosmos and Avalanche.
Cardano is considered to be a “third generation” cryptocurrency. This means that where Bitcoin introduced tokens and Ethereum introduced smart contracts, Cardano is designed to introduce scalability and interoperability into the cryptocurrency ecosystem.
This goal is a big ask since the current question mark hanging over cryptocurrency is whether it is even possible to scale it.
What makes Cardano different?
There are a number of reasons why Cardano could be worth investing in or participating in, including its strong development team, its commitment to sustainability, and its focus on delivering real-world applications. The developers of Cardano are constantly working on new updates and improvements to the platform. Here are a few standout reasons:
One of Cardano’s most distinguishing features is the fact that it is one of the only major blockchain projects to have undergone an academic peer review process to confirm its functionality. A review of this type is rare in the crypto space and provides significant credibility to Cardano as a project as it reduces the likelihood of undiagnosed errors appearing in the next 2-4 years.
Unfortunately, it also makes it harder to iterate development quickly as other layer-1 smart contract networks like Solana are able to do. Conversely though, these competitor chains are prone to more breakdown and network outages.
Banking Africa’s Unbanked
Another unique aspect of Cardano is its mission to become a truly global leader in crypto adoption, especially in Africa, where it’s looking to help create a decentralized banking system for the continent’s unbanked citizens which number hundreds of millions of people.
Cardano will for example be able to issue micro-loans to people who do not have a credit or transaction history, using P2P technology to create a transaction and credit history for users who would otherwise not be able to get funding.
Cardano was designed from the ground up to be as secure, versatile and scalable as possible, making it ideal for use in business and enterprise applications.
Cardano’s 5 Eras (development cycles)
It is difficult to determine an exact timeline for Cardano’s roll-out, but the team aims to complete the project by 2025.
The Cardano development plan is split into five separate eras, named after important scientists, artists, and philosophers:
|Byron||Foundation||Building the basics of Cardano.||Completed|
|Shelley||Decentralization||Growing and developing the network. The Shelley era is still ongoing and is designed to achieve a smooth low-risk transition to full decentralization without service interruptions.||Major features of the Shelley era, such as stake pools, are already implemented.|
|Goguen||Smart Contract||Implementation of smart contracts.||The groundwork for Goguen took place during the development of Shelley.|
|Basho||Scaling||Optimization era that will revolve around improving Cardano’s existing features and scalability, with the help of side chains for example.||Pending|
|Voltaire||Governance||The culmination of the Cardano project. This will introduce the necessary governance features to make Cardano truly decentralized.||Pending|
How Is Cardano Different From Bitcoin Or Ethereum?
The key to understanding the potential value of Cardano compared to its competitors is to look at its three aims. The project’s purpose is to improve the scalability, interoperability, and sustainability of cryptocurrency platforms. Achieving this goal would give Cardano raised utility over Bitcoin and more scalability than Ethereum.
The Cardano ecosystem is unique in that it encompasses three layers: the settlement layer, the computation layer, and the control layer. This layered approach makes it more secure and efficient than other cryptocurrencies.
Scalability and Sustainability
Ethereum-based decentralized apps (DApps) have been enormously popular. For example, the popular DeFi exchange UniSwap processed over $10 billion in weekly trades in the third week of April.
This popularity has come at a cost. As the usage of Ethereum-powered DeFi apps has increased, the strain on the Ethereum blockchain has also become bigger. Transaction prices shot to over $50 for a simple trade last year, which locks out many smaller crypto investors from using the DeFi infrastructure.
The PoW Problem
The key culprit of this problem is Proof of Work (PoW) consensus. It relies on large numbers of computers competing to solve a complicated puzzle to process “blocks” of transactions on the Ethereum blockchain. These transactions currently can’t be processed in parallel, which means that each block needs to move one at a time.
The result is significant bottlenecks, and users are forced to pay higher fees to get their transactions on the blockchain.
Bottlenecks present a huge problem. If cryptocurrency-based services are too expensive for normal users to access, then the crypto ecosystem will become unsustainable, forcing users to return to traditional services. To help get around this, Cardano uses an algorithm called Ouroboros.
Ouroboros’ Stake Pools
The most important aspect of Ouroboros is its Proof of Stake (PoS) consensus. Instead of miners, Cardano relies on users who have set special nodes, called stake pools, which are responsible for verifying and pushing a collection of transactions to the Cardano blockchain.
A “leader” pool is selected for each slot, based on the amount staked in that pool, and that user receives a reward for their service.
One of the main criteria for the Ouroboros algorithm is the amount of ADA staked in a pool. Thus, users can delegate a portion of their own ADA to a stake pool. If that pool is selected to lead a slot, all users with staked ADA will receive a portion of the reward.
The overall system encourages more users to participate in the staking process, securing the network in the long term.
Cardano is also implementing Recursive InterNetwork Architecture (RINA). This network topology enables custom changes to heterogenous (diverse) networks.
In layman’s terms, RINA has fewer protocols than other topologies but can work faster while still providing transparency, privacy, and scalability.
Another major challenge for cryptocurrency is interoperability. It’s currently difficult for cryptocurrencies to interact across different blockchains and with the wider financial ecosystem.
Although it is possible to conduct cross-chain transactions using smart contracts, they are often costly and slow. They also require users to trade their tokens for a different compatible version — which could lead to a taxable event in certain jurisdictions.
Cardano plans to address interoperability by allowing cross-chain transfers through side chains. Transactions can then occur between two parties off-chain, bypassing the need to process those transactions until they are complete, reducing time and risk.
Money Laundering Prevention
Another ADA feature is the ability for institutions and individuals to divulge metadata related to transactions and identities. Cardano partnered with AML company Confirm in 2021.
Metadata releases would resolve many of the money laundering-related concerns surrounding cryptocurrency, as it would be possible to divulge your identity, without handing over the keys to your wallet. Cardano’s Long-Term Development Plan
The big concern surrounding Cardano is that it’s a very ambitious project without much to show for it. The basics are all there: the ability to participate in staking pools and to send and receive ADA. However, game-changing features like smart contracts have only been introduced in the last year and are still in their infancy on Cardano.
Cardano Use Cases
Some potential use cases for Cardano include the following:
– Corporate financial transactions
– Voting and governance
– Supply chain management
– Health care data management
– Music and digital rights management
Benefits of Cardano
Here are some of the benefits of using Cardano:
1. Cardano is very user-friendly, since it’s very easy to create and use smart contracts on the Cardano platform.
2. Cardano is very secure. It uses a unique protocol that makes it resistant to cyber-attacks.
3. Cardano is very scalable. It can handle a large number of transactions per second (TPS), making it suitable for commercial use.
4. Cardano is very affordable, with transaction fees as low as 0.1 ADA.
5. Cardano is backed by a very strong team of developers, academics and experts in the field of cryptography and blockchain technology.
6. Cardano is eco-friendly, since it’s a proof-of-stake blockchain.
7. Cardano is very decentralized, with over 1500 validator pools at the moment.
8. Cardano allows any holder to earn passive income by staking ADA on a number of wallets.
Cardano has a lively and growing ecosystem of projects and dApps that can be explored here in more detail. The Built On Cardano site also provides a lot of deep insights into Cardano’s ecosystem of Dapps and their development.
What is the Best Cardano (ADA) Hardware Wallet?
CoolWallet Pro is one of the best Cardano (ADA) hardware wallet choices for ADA holders. This cold storage device offers secure native ADA storage and trading options in complete offline conditions. First launched in 2016, CoolWallet Pro and S are perfect for Cardano wallet owners on the go, because it is so convenient, safe, and easy to use.
Safety: CoolWallet provides top ADA cold wallet security and peace of mind thanks to its powerful hardware security features, such as:
- EAL6+ secure element
- encrypted military-grade Bluetooth communication
- 2+1 FA biometric verification that requires a physical button push for all transactions.
- e-ink screen to visually confirm all DOT transaction details
Convenience: CoolWallet Pro looks like a credit card and is completely waterproof and tamper-proof thanks to its patented cold compression design, making it the perfect Cardano hardware wallet to discreetly keep with you wherever you go.
Learn more about CoolWallet Pro and its ADA cold storage here